Study On The Mechanism Of Formation And Fluctuation Of Pig Price In China

Pig-breeding industry in China has entered mature period after nearly30year’s development. The sustained growth of this industry satisfies the consumption demand for pork of urban and rural residents well. However, the cyclical fluctuations of live pig price disturb its steady development excessively and cause difficulties for pig breeding and its related links. To alleviate such cyclical fluctuations and promote the industry development becomes a widely concerned issue of government and scholars. There have been researches on the characteristics, reasons and relevant policy recommendations of pig price and production’s fluctuation currently. Besides, the government has issued various policy measures to promote the development of pig industry either. Nevertheless, the fluctuations of pig price show more wild than leveling off. The live pig price in China has fluctuated more violently since2011, which turns out that it’s still necessary to analyze the mechanism of those fluctuations further.This study focus on the price of live pig and analyze the its fluctuations’ characteristics, mechanism, influencing factors and interaction mechanism among them from the time dimension, based on the economic fluctuation cycle theory, the supply and demand theory, and price conduction theory. Finally, this study summarizes the related conclusions and puts forward relevant policy suggestions for government and production operators based on the references of both domestic and foreign pig industry policy.The conclusions include:First, the price fluctuation of live pig is cyclical and each cycle has different configuration, peaks, troughs and cycle length. The current cycle has larger differences among the former, which hog prices remain low for a long time. Compared with the live pig price cycle in United States, the cycle in China is longer, the variation coefficient of price is higher and the change is uncertain in each cycle. In addition, among the price of different products, piglet’s price is most volatilizing, and a live pig, as well as the pig price is minimal.Second, from the perspective of the market space in the Pig-producing areas, the cost of resources is rising in main traditional pigs producing areas and its transferring fast to the emerging producing areas. In recent ten years, the growth and proportion of general expenses in pig breeding has changed significantly. From2009to2013, the average growth rate of total cost declined slightly and the growth of cost of piglets, feed and death and disease damages declined. But the growth of expenditure of labor, water, fuel, and power rose sharply, up more than5%. Live pig prices between regions showed a relatively stable functional relationship. Shandong, Sichuan, Henan played the obvious leading role. Among the variance decomposition of the price fluctuation in different provinces, price disturbance form itself is one of the important factors leads to fluctuations.Third, the influencing factors of price cyclical fluctuations can be classified into two aspects: supply and demand. From the supply level, the livestock’ own growth and developing law lead to its production cycle. Production costs increased ceaselessly, including cost of piglets, corn and pig farming structure, the impact of epidemic and the multiple effects of macroeconomic policy. From the demand level, income and substitutes for pork are both the main factors influencing the consumption. As empirical results showing that, costs of processing and circulation, piglet prices and substituted chickens price are the most significant factors influencing those fluctuations. The current cycle takes on the characteristics of low prices, besides the impact of easy supply and weak consumption; the real problem lies in the lack of accurate prediction of amount and information guide mechanism.Fourth, the diverse industry characteristics and market structure of each link leads to the difference of its market pricing power, and the obvious asymmetry in price conduction between each link in the industrial chain. Resulting from the loose collaboration among longitudinal interests, integration is insufficient in production and sales management. As small range structure dominates, production is lack of economies of scale. As information asymmetry between industry chain nodes, pig-breeding link is vulnerable in the market, which makes the uneven distribution of interests among pig industry chain links.Fifth, the key of stability of the live pig price is to establish and improve the early warning and control system for production of live pigs and its diseases.The characteristic and innovation of this study aims to:①Concluding the common rules and characters of cyclical fluctuant of pig prices in China since2000respectively to reveal the further tendency and characters of new cyclical fluctuant.②Studying the live pig price is more complex resulting from the live pig market in cultivation region has periodic change, as well as the cyclical fluctuant and abnormal fluctuationgs of live pig price also has a complexity tend. The direct cause fluctuation of the live pigs price is that piglets fee and cost of circulation had increased, while the sow productivity had declined, furthermore, the deep reason of fluctuation of the live pigs should attribute to the pig farming mode of operation and management and technology, as well as the pigs of disease prevention and control.③There is a more comprehensive research thought and logic frame in studying live pig price and its influence factors from three dimension, such as timing, spacing and industry chain.